Heidi Diaz had a plan to conceal and dissipate her assets when she found out that a class action lawsuit was contemplated by the members of Kimkins.com. 1
On the date of the original writ of attachment hearing, October 16, 2007, Heidi Diaz had $878,252.79 in a mutual fund. A copy of the T. Rowe Price mutual fund account statement is attached to the deposition transcript of Heidi Diaz as Exhibit 39. On October 18, 2007, Heidi Diaz directed T. Rowe Price to close the account and send her a check for $878,252.79, which she placed in her Bank of America account. Heidi Diaz was then served with a deposition notice for November 4, 2007, but pursuant to her request, her deposition was rescheduled for November 12, 2007.
On Friday, November 9, 2007, the last business day before the deposition of Heidi Diaz, Heidi Diaz contacted an accountant referred to her by her lawyer. The accountant, Rahul Shaw, had not reviewed any of the financial documents of Heidi Diaz or of Kimkins.com. Nevertheless, Heidi Diaz stated that the accountant who had never examined or evaluated any financial document advised her to unilaterally write a check to the U.S. Treasury Department in the amount $700,000.
Heidi Diaz also testified at her deposition that on the afternoon of November 9, 2007, this same accountant advised her to write a check to the California Franchise Tax Board, without having reviewed a single document. Accordingly, on the afternoon of November 9, 2007, Ms. Diaz wrote check number 1501 to the U.S. Treasury for $700,000, and check number 1502 to the Franchise Tax Board for $100,000.
Heidi Diaz bragged on the internet about her efforts to conceal and dissipate assets. She prepared for the class action lawsuit and anticipated collection efforts. On August 14, 2007, Heidi Diaz and Kimkins.com member and administrator Christin Sherburne engaged in an internet conversation concerning anticipated lawsuits. Allegations of fraud and misleading advertising had been made and Heidi Diaz made the following, unsolicited statement to Mrs. Sherburne:
Heidi Diaz: Christin, have time for Law 101?
Heidi Diaz: In a nutshell, there can be no class action lawsuit or any lawsuit. ... If you had a bad car accident -- broken arm, concussion but hit a poor person with no insurance you COULD NOT get a lawyer. There is no ‘recovery’. There is no money to receive. It’s the same with Kimkins. There is no $$$. They don’t even have jurisdiction. No lawyer would touch it. do they even know who “kimmer” is. well, in a real class action suit the company is ordered to pay legal costs. but who will pay?... Anyhow, bottom line for today’s law lesson: No recovery, no lawyer.... You have to make allegations. They must be substantiated. Backed up with doctor’s reports, etc., not just that (1) prove their health before Kimkins; (2) prove that “but for” doing Kimkins there would not have been damages; (3) must have damages; (be hurt) all that takes $$$. they have to hire a doctor, get tests, deposition of doctors & whoever they can find at kimkins ;)”
Also on August 14, 2007 Ms. Diaz informed Mrs. Sherburne that “technically you can get a judgment and sue a person in court, but so what? How would you get your $$? can’t.” However, the exchange ends with an ominous statement by Heidi Diaz regarding possible future litigation. Heidi Diaz told Mrs. Sherburne, “If anything ever happened and you were involved, I am here for you $$$.”
Another attempt to evade collection was a statement publicly made by Heidi Diaz that she was no longer the owner of Kimkins.com. She now admits under oath that her statement was false. On October 4, 2007, Heidi Diaz told members that the Kimkins website was under new ownership. She claimed that she would not be the owner but would merely serve as an advisor. At her deposition, she stated that representation was false. A true and correct copy of the announcement prepared by Heidi Diaz revealing the change of ownership is attached to the deposition of Heidi Diaz as Exhibit 48.
Heidi Diaz admitted under oath to further testimony confirming her plan to dissipate assets. She admitted to making the following statement as “Kimmer” to one of her administrators:
“Unfortunately for this brilliant attorney, he is going to be disappointed to find that there is no pot of gold for recovery in the suit. Heidi collects the revenue, but does not keep it. You can imagine him telling the judge that wants to certify a class action against a housewife? Hehehe.”
Heidi Diaz has also recently formed other companies and a trust. For example, she recently paid a paralegal to form a family trust in which she intends to place assets. However, the family trust is misleading as it uses the name “Beauchamp” instead of Diaz. She formed a company known as Halcyon Web, LLC on September 24, 2007 with the specific intent of transferring all of the Kimkins assets to that company. She has also paid a paralegal to form a company known as Sharp Plumbing, LLC. She stated the company was for her son. However, upon examination she admitted that her son is not a licensed contractor and the address for the plumbing company is merely a P.O. Box. It is the same P.O. Box of Kimkins.com. She admitted that there is no physical business for Sharp Plumbing, but that company is on the internet.
1 California Penal Code Section 531 states: Every person who is a party to any fraudulent conveyance of any lands, tenements, or hereditaments, goods or chattels, or any right or interest issuing out of the same, or to any bond, suit, judgment, or execution, contract or conveyance, had, made, or contrived with intent to deceive and defraud others, or to defeat, hinder, or delay creditors or others of their just debts, damages, or demands; or who, being a party as aforesaid, at any time wittingly and willingly puts in, uses, avows, maintains, justifies, or defends the same, or any of them, as true, and done, had, or made in good faith, or upon good consideration, or aliens, assigns, or sells any of the lands, tenements, hereditaments, goods, chattels, or other things before mentioned, to him or them conveyed as aforesaid, or any part thereof, is guilty of a misdemeanor.